Paul Pfeifer
By Paul Pfeifer

The Ohio Department of Natural Resources (“ODNR”) owns a 651-acre tract of land in Brush Creek Township, Jefferson County, that became the subject of a case that we reviewed here – at the Ohio Supreme Court.

When the property was transferred to ODNR, the seller – Ronald Snyder – “reserved all mineral rights, including rights of ingress and egress and reasonable surface right privileges.”

After determining that about 10 percent of the land contains roughly $2,000,000 worth of coal, Snyder informed ODNR that he wanted to surface-mine the coal. But ODNR won’t allow surface-mining, which Snyder claims is the only economically viable method of removing the coal.

Snyder filed a complaint in court seeking a determination that he is “entitled to surface mine and to auger mine a small, reasonable portion” of the property. ODNR moved for summary judgment – meaning it asked the judge for a ruling without a trial.

The court granted the motion, stating that although the reservation of mineral rights implies “the right to remove the minerals, it does not imply the right to remove them by strip mining methods.”

In pointing to other cases that dealt with this issue, the court said that “strip mining does not merely use the surface, it destroys the surface.” The court said that in order to reserve the right to strip mine, that right must be expressly reserved.

The court of appeals affirmed the trial court’s decision.

After that, the case came before us. The ultimate issue was whether the contract language, which grants “reasonable surface right privileges,” entitles Snyder to engage in strip-mining.

There were two prior court decisions that were cited in this case – one from 1974 and another from 1996. In both cases, our court followed the well-known principle of interpreting contract language “so as to carry out the intent of the parties, as that intent is evidenced by the contractual language.”

The 1974 contract used “language peculiarly applicable to deep mining,” and, at the time the deed was signed, the technique of strip-mining was not known in the county where the land was located.

The 1974 court therefore concluded that “the right to strip mine is not incident to ownership of a mineral estate. Because strip mining is totally incompatible with the enjoyment of a surface estate, a heavy burden rests upon the party seeking to demonstrate that such a right exists. This is especially true when the deed relied upon was executed prior to the time strip mining techniques became widely employed.”

Our court reached a similar conclusion in the 1996 case. But both of those cases are inextricably tied to the contracts at issue at the time. The contract in Snyder’s case contains no language that is peculiar to deep mining.

Neither the owner of the surface interest nor the owner of the mineral interest has full ownership. Each has rights that are subject to the rights of the other. Thus, the owner of the surface interest cannot reasonably claim that no minerals can be mined, just as the mineral interest owner cannot reasonably expect to have unfettered access to the minerals.

Tension between the owner of the surface interest, who seeks to maximize the value of the surface, and the owner of the mineral interest, who seeks to maximize the value of the minerals, is inevitable. To resolve this tension, “each owner must have due regard for the rights of the other in making use of the estate in question.”

The contract granted Snyder “all mineral rights, including rights of ingress and egress and reasonable surface right privileges.” Despite these ordinary words, the two parties reached vastly different interpretations of what the clause means.

Snyder interpreted “reasonable surface right privileges” to entitle him to strip-mine a portion of the property. ODNR thought that it entitled Snyder to access the property to facilitate deep mining.

We were disinclined to believe that strip-mining is always inconsistent with the surface owner’s rights. In this case, Snyder sought to strip-mine and auger mine about 10 to 15 percent of the total acreage. We can conceive of situations in which strip-mining roughly 60 acres and then remediating that land would not be worse for the owner of the surface rights than deep mining the entire plot, which would require extensive road access, mine shafts and other impediments to enjoyment of the surface.

The latter situation might render the entire plot unusable for the duration of the mining, even as the former situation might have limited impact on the remainder of the land. There’s no way for us to quantify the impact of either type of mining, but we weren’t convinced that surface mining is always worse for the owner of the surface right than deep mining; it depends on the circumstances and the reasonableness of the surface-mining.

All mining damages the surface interest. Strip-mining may be inconsistent with surface rights, but so is deep mining, and in any event, the surface owner is not sovereign. Of course, neither is the owner of the mineral rights.

Snyder’s contract contained a phrase – “reasonable surface right privileges” – that has not been used in any reported court decision. Strip-mining was well known in Jefferson County when the contract was signed. In fact, some areas of the property were strip-mined before ODNR acquired it.

Thus, there’s reason to believe that signatories to the original contract understood that “reasonable surface right privileges” included the right to strip-mine, and there’s no reason to believe that the signatories intended to exclude strip-mining.

Given the unique contract language that was used, we were convinced that the contract entitles the owner of the mineral rights to surface-mine the property, subject to the reasonableness standard of the contract.

Therefore, by a six-to-one vote, we sent the case back so the trial court could consider how much acreage is to be mined, where it’s located on the property, the duration of the mining, and the quality of the remediation to be done. In short, the court is to determine what is “reasonable.”

NOTE: The case referred to is: Snyder v. Ohio Dept. of Natural Resources, 140 Ohio St.3d 322, 2014-Ohio-3942. Case No. 2012-1723. Decided September 17, 2014. Majority opinion written by Justice Paul E. Pfeifer.